Financial 15 Split Corp. and Financial 15 Split Corp II: Market and Portfolio Update

Fueled by the intensification of the ongoing credit crisis, world financial markets reached a level of "panic" during the last several weeks which arguably has never been seen by investors on such a global scale. Several of the largest financial institutions in the United States and around the world required unprecedented government intervention in order to rescue them from complete insolvency. Others were required to make emergency decisions to save their businesses by being acquired by other stronger partners. The volatility index reached record levels indicating investor fear was at historically high levels. In the short term, this financial crisis has had a very broad and severe impact on investments across the world. All sectors of the financial markets from financial services stocks to commodity based stocks have been aggressively sold down. It appears the selling pressure has been greatly exacerbated by forced liquidation required by assorted investment funds responding to redemption demands and the need to de-lever their portfolios to meet margin calls. This has caused dramatic short term moves as these funds try to raise "cash" from the most liquid sources which in many cases are the large capitalization stocks. Governments around the world have delivered a clear message that they are willing to continue to take significant action and do whatever is necessary to support financial markets and restore confidence. The Manager believes these actions will ultimately prove to be the pivotal turning point in the recovery of financial markets.

The impact of the broad based selling has adversely impacted the portfolios of Financial 15 Split Corp. ("Financial 15") and Financial 15 Split Corp. II ("Financial 15 II"). The net asset values have declined by approximately 15% from August 31, 2008 to October 15, 2008. The Manager believes current valuations of many of the stocks in the portfolios are now trading at extremely attractive levels. In particular, dividend yields on the portfolios have reached historically high levels compared against fixed income securities and the level of inflation. The current yield in the underlying portfolios is 5.4%. Most of the companies in the portfolios have excellent earnings growth histories and have long records of maintaining and growing their dividends over time. As interest rates are expected to continue to decline over the coming months, these higher dividend yields should provide meaningful support to the stock prices of these companies even through this economic slowdown. As a result of the volatility index reaching all time record highs, the option premiums available in the market are also attractive and are allowing the Manager to add significant levels of additional income to the portfolios. The current portfolios have a weighting of approximately 78% in the 10 Canadian core financial services companies and 22% in the 5 core US financial services companies. The current government actions are expected to result in significant improvement in the credit markets over the coming months and allow a return to a more favourable operating environment for financial services companies. In addition, when capital market liquidation slows or ceases and investors return to fundamentals of the underlying companies, we believe the portfolios will be fairly rewarded. High dividend yields, low valuations and significant option premiums available in the market place all bode well for the Financial 15 and Financial 15 II portfolios. The Manager continues to actively manage the relative weightings of the companies held within the portfolios.

Financial 15 invests in a high quality portfolio consisting of 15 financial services companies made up of Canadian and U.S. issuers as follows: Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, Toronto-Dominion Bank, National Bank of Canada, Manulife Financial Corporation, Sun Life Financial, Great-West Lifeco, CI Financial Income Fund, Bank of America, Citigroup Inc., JP Morgan Chase & Co., Merrill Lynch, Wells Fargo & Co. Shares held within the portfolio are expected to range between 4-8% in weight but may vary at any time.